"You can imagine my reaction when I saw this article on the front page of the Huffington Post: White House Confirms: Deal With Big Pharma Bars Price Negotiations. How could that be?

It turns out that Obama has had lobbyists from Big Pharma in contact with the White House negotiating on their behalf about the "comprehensive" health care reform measures. The White House has signaled that it won't support two things we need in order to fix the problem in return for the Drug Lobby's support on the rest of the package.

The two things he sold us out on? You probably already read this and are just as pissed as I am, but I'll reiterate for the rest of you: it seems as though Obama isn't interested in saving tax payers' money, and doesn't want to allow Medicare to negotiate the price of the drugs it buys in bulk. And importing cheaper drugs from Canada (a country with sensible regulation on con artists like the drug companies)? That, too, is right out.

Obama is supposed to bring change, not bring us more of the same sorts of dealings with lobbyists and kowtowing to corporate interests. Is it a ruse? Is he just pretending?"

actually veritas, the term margin represents a percentage....your profit 'margin' is what percentage your profit (in dollars) was of your sales/revenue.

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His point is that unless you are turning over that product over and over, at a high rate, a profit margin doesn't mean shit.

Say if I buy something for a quarter, and then sell it for $100. My margin is astronomical.

But if I am able to only do it once, then I'm probably not in business very long.

Obviously it doesn't mean much for the purposes of this discussion, since I don't think the whole Pharma industry is going to tank.

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yes, turning your inventory at an appropriate rate is part of the calculation of your ROI, return on investment...something else to analyze...

and is not part of these charts that are in this thread, which are analyzing how companies compare to one another within each sector of industry, or within the sector itself, and since all companies vary in size, the percentage their profits were of their sales puts all companies on an apples to apples basis, small or large in size, and this is why the profit 'margin' (or profit percentage) is used in the charts and links.

now, lets go back to turn rate for a second...your sales divided by your average inventory gets your annualized turn, to get your monthly turn rate...you take your sales times 12 (this annualized it) divided by your beginning inventory of the month or more accurately your average inventory for the month if you took in receipts on it during the month as well...

basically a turn rate is at what rate do you sell out of your product each year....a 2.0 turn would mean you sold out of your initial inventory, twice in one year. a 4.0 turn rate would mean you sold out of your initial inventory 4 times in a year...etc.

your turn rate alone, tells you nothing about how profitable you are as a company...it is part of ones strategy to GET TO your profit plan....you could choose to price your product at a very low initial markup and sell it quickly at a 6.0 turn rate, or price your product with a higher initial markup (a higher retail price) and sell it slowly at a 3.0 turn, both strategies can get you to the same 'planned' profit come year end.

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